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Moody's affirms ratings of Vietcombank, upgrades baseline credit assessment

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Moody's affirms ratings of Vietcombank, upgrades baseline credit assessment

Moody's affirmed the long-term local-currency deposit, and local- and foreign-currency issuer ratings of Joint Stock Commercial Bank for Foreign Trade of Vietnam, or Vietcombank, at B1.

The rating agency said May 29 that the outlook on the B1 ratings is positive, in line with the recent upgrade of the country's outlook.

Meanwhile, Vietcombank's long-term foreign-currency deposit rating was also affirmed at B2 with a stable outlook, as the rating is restricted by the B2 foreign-currency deposit ceiling for Vietnam.

The bank's baseline credit assessment and adjusted baseline credit assessment were upgraded to "b1" from "b2", while its long-term counterparty risk assessment was upgraded to Ba3(cr) from B1(cr).

Further, the rating agency affirmed the bank's short-term local- and foreign-currency issuer and deposit ratings at Not Prime, and short-term counterparty risk assessment at NP(cr).

Moody's has ended the review for an upgrade of Vietcombank's baseline credit assessment initiated Sept. 5, 2016, which was associated with the rating agency's expectation that a successful capital infusion in the bank would "materially" improve its capital position.

The affirmation of the bank's ratings and the upgrade of the long-term counterparty risk assessment follow the upgrade of the bank's credit assessment to a level equal to Vietnam's sovereign rating. However, another upgrade of the bank's credit assessment is unlikely in the next 12 to 18 months.

In line with its positive outlook, the B1 ratings could be upgraded if Vietnam's sovereign rating is upgraded. The rating agency could also revise the bank's ratings outlook to stable from positive, if the outlook on the sovereign rating is revised to stable.